Adelaide Timbrell

Yes, it is good news.

And we do see the unemployment rate continuing to fall.

We should note that it's already around 4%, which is over a full percentage point lower than what we saw before COVID.

So we are in a much stronger labour market now than we were

before all those lockdowns started.

And I think the economy in a lot of ways is going a lot better than back in 2019.

So there's a lot to be said about, you know, how many people have jobs and the fact that there's still really strong demand for extra workers as well.

And the fact that we've got low unemployment that's going to go lower and lots of employers looking for extra workers does mean that we will eventually see wages growth rise.

What's going to make it a bit slower than what we might see in other countries compared to Australia is that Australia has some slow wage processes, by which I mean we've got a lot of people on enterprise bargaining agreements, which means that it can take a while for some wages to go through.

But what we are seeing is people are switching jobs to get a rise in the paychecks.

And between that and the very, very strong household savings that a lot of people have built up over the last two years being in lockdown,

has really helped with deposits on both sides.

It's going to happen very soon, we think.

So the ANZ forecast is that we will see the first cash rate hike in June.

Then we'll see two more in July and August and another one in November.

So the cash rate in Australia is currently 0.1%, but by the end of the year, we are now expecting it to be up at 1%.

this is a pretty big and fast increase in the cash rate after not having an increase in the cash rate in Australia since around 2009, 2010.

But because a lot of households, particularly those households with debt, do have huge savings buffers, this shouldn't create any big problem in the housing market, certainly not in terms of

forced selling you know people not being able to keep up with their mortgage payments and then flooding the market with houses we don't think that will happen just because of those strong household savings buffers and the very low unemployment rate.

Yes, exactly.